Novartis Boosts Earnings Forecast, Announces Major Stock Buyback
Strong Performance and Improved Financial Outlook
Swiss pharmaceutical giant Novartis AG (NYSE: NVS) has reported impressive earnings for the second quarter of 2025, leading to an update in its financial outlook. The company achieved quarterly sales of $14.05 billion, closely aligning with analyst expectations of $14.06 billion.
Sales Growth and Earnings Results
Year-over-year, net sales saw a remarkable growth of 12%, translating to an 11% increase when adjusted for constant currency. Core operating income surged by 20% to reach $5.93 billion, further highlighting Novartis's robust financial health.
Key Contributors to Sales Growth
The sales increase can be attributed to several high-performing products in Novartis' portfolio. The breast cancer treatment Kisqali generated $1.18 billion, marking an impressive 64% increase in constant currency. Other notable contributions came from Entresto, which earned $2.36 billion (+22% cc), Kesimpta for multiple sclerosis at $1.08 billion (+33% cc), and new therapies such as Scemblix and Leqvio, each bringing in $298 million (+79% and +61% respectively), alongside Pluvicto with $454 million (+30%).
Share Buyback Program Announcement
In addition to these results, Novartis has announced the initiation of a significant share buyback program worth up to $10 billion, scheduled for completion by the end of 2027. CEO Vas Narasimhan stated, "Our robust balance sheet and confidence in our mid- and long-term growth enable us to initiate an up-to $10 billion share buyback as part of our commitment to balanced capital allocation." This move reflects the company's commitment to maintaining a balanced capital structure while fostering shareholder value.
Outlook for 2025
Looking ahead, Novartis reaffirmed its guidance, anticipating net sales growth in the high single digits for the fiscal year 2025. The core operating income is projected to grow in the low teens, adjusting expectations from earlier forecasts of low double digits. The company is also preparing for the potential entry of generic versions of Entresto expected by mid-2025, although this remains subject to ongoing intellectual property and regulatory litigation.
Management Changes
In a related announcement, Novartis disclosed a key leadership transition. Chief Financial Officer Harry Kirsch will retire in March 2026 after an impressive 22-year tenure, including 12 years as CFO. He will be succeeded by Mukul Mehta, currently the head of business planning and analysis, digital finance, and tax at Novartis.
Stock Market Performance
Following these announcements, Novartis shares experienced a slight decline, trading down by 1.71% to $116.35 during pre-market activity. Despite this dip, the overall financial health and strategic initiatives suggest optimism among investors.
Frequently Asked Questions
What did Novartis report for its Q2 earnings?
Novartis reported $14.05 billion in quarterly sales, nearly matching analyst expectations, with a 12% year-over-year growth in net sales.
What is Novartis's outlook for fiscal year 2025?
The company expects net sales to grow in the high single digits and core operating income to increase in the low teens.
What stock buyback program has Novartis announced?
Novartis announced a $10 billion stock buyback program to be completed by the end of 2027.
Who will succeed Harry Kirsch as CFO of Novartis?
Mukul Mehta, currently in charge of business planning and analysis, will replace Harry Kirsch as CFO.
How have Novartis shares performed after the announcements?
The stock saw a slight decrease of 1.71%, trading at $116.35 in pre-market activity.
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